A Preliminary Benefit/Cost Framework for Counterterrorism Public Expenditures

The author develops a range of rough estimates of the benefits and costs of a U.S. counterterrorism effort in the context of moderate (based on Northern Ireland in 1999), severe (recent Israeli experience), and nuclear terrorist attacks against the United States. The analysis suggests that the marginal benefit may exceed the marginal cost, and thus that spending may in fact be little. Another important facet of the problem is who is to finance the counterterrorism efforts-the federal government or state or local agencies.